Two articles on from the excellent World Policy Institute blog

This is an article about Mexico's woes with the drug cartels. As the author points out, Mexico today has much in common with Colombia a decade or two ago. I marvel though that for all its involvement in the cocaine trade, Mexico actually produces none of it. Almost all the world's cocaine is still produced in Colombia, Peru, and Bolivia. It seems that once again farmers and producers of goods are getting a raw deal. Mexico's cartels, which merely transport and market cocaine, are reaping huge profits, while coca farmers and cocaine processors get very little of the final price of cocaine in the US. One bright spot for farmers is that I don't think Mexico's profits are at the expense of farmer incomes, but rather that Mexican gangs are capturing parts of the value chain that Colombian and US gangs used to control. And of course I imagine the final consumer is paying more for cocaine.

Anyway, this issue reminds me of a conversation I had recently with my wife, who did her masters thesis on opium production in Laos. There in Laos opium has longed served as a sort of social safety net. Subsistence farmers that consume most of their food production can get a bit of cash from selling opium. This cash serves to improve housing, buy hand-tractors, pay for medicine, etc. In addition, the opium produced or bought by farm families goes in large part to the elderly, who smoke opium as a way of soothing the pains of old age and the hunger of poverty. But now, as the Lao state cracks down on opium production, farmers lose this source of income, and seniors lose this source of solace. Incidentally, as opium production and consumption in Laos goes down, consumption of synthetic drugs like ecstasy and amphetamines is rising. So we see a natural product that benefits farmers and the most marginalized people in society, being replaced by more dangerous synthetic products that benefit foreign producers, criminals, and chemical companies.

Here is an article on a totally different topic--the suffering of Cuban's during the "transition period" of the early nineties, when the fall of the Soviet Union rocked Cuba's economy. The article was written in 1996 and so is a bit dated, but I know that the gap between what the Cuban government provides and what people need continues to be a big issue in the country. It seems to me that the Cuban government would do well to loosen control over the majority of economic sectors, while aiming to focus its centralized planning on a few key areas.

If anyone were to ask me, I would sit down with Cuban officials and recommend that they decide what areas are so central to well-being and the Cuban Revolution's mission that they don't want to entrust them to the market. I'm thinking things like food, medicine, and schooling. The government could continue to provide and regulate these services to the populace, or at least guarantee a base level for everyone, and leave the sale and provision of other things (like the guitar strings cited in the article) to individuals operating their own enterprises. This would free the government of the burden of trying to provide people with all their desired goods, while freeing the citizenry from the shortages and frustration of daily life. If the government were to remain in charge of certain basic welfare areas, it could continue to advance its socialist vision and remain in power, while garnering more support among regular people. Even in these basic areas, the government could allow certain free market aspects, as I believe is already the case with farmers markets where producers sell their own produce.